Hewlett-Packard is extending the concept of providing total solutions to home and small and medium-sized enterprise (SME) users. It has developed a digital imaging solution comprising its wide range of products - digital cameras and scanners for input, multimedia PCs for processing, CD-rewritable drives for storage, and deskjet printers and all-in-one printer-fax-copier-scanner machines for output. All these new products will be rolled out in Hong Kong this year, targeting home and small business customers. However, HP would not sell the products as a total package at a discount, because most users already used some of them, the company's channel manager in Hong Kong, Michael Lam, said. It was not exactly pricing but the value for money that was the primary concern for consumers, Mr Lam said. 'For example, prices of PCs have remained around $10,000 for half a year, while vendor competition focuses more on added value such as bundling items,' he said. HP's strategies in the consumer market were to make products easier to use and to improve services, which included not only traditional maintenance and technical support, but application advice to enable customers to fully utilise products. The company would offer customers free phone assistance for its new products for three months. It also said it would work closely with resellers to teach end-users how to use the machines when they made purchases. Hewlett-Packard has launched a customer-care Web site ( www.hp.com/hp-at-home/ap/ ) where it shows the latest product information and user tips and offers free software for download. It recently launched a Web site ( www.buyhp.com.sg ) for customers in Singapore to place orders. This differs from Dell's Internet sales model because, in HP's case, resellers still play a role, handling order fulfilment - billing and product delivery. Despite the economic downturn and retail slump, the home market for information technology (IT) products was still there, Mr Lam said. HP had been able to achieve single-digit growth in PC revenues in the first half of this year, he said. The same is not the case for the company's inkjet printer sales, which reported growth in sales volume but not revenue. This is due to the trend to bundle inkjets with PCs, resulting in a price drop of 20-30 per cent. Mr Lam said about one-third of inkjet printers sold in Hong Kong were bundled with PCs. The impact of the economic downturn on small businesses was more obvious, he said, although HP had been able to double its market share in the sector because it started with a small number. HP's small business initiative is to partner related organisations, such as the Hong Kong Productivity Council and Trade Development Council, and to work with appropriate resellers. HP ranked as the third largest home PC vendor in Hong Kong in the first quarter, behind Acer and IBM. It was fourth in the small business market behind IBM, Compaq and Acer. HP does not expect demand in the home and small business market segments in the second half to be as good as in the first half. For the full year, the two segments would be flat compared with last year, Mr Lam said.
